Expanded ERCOT Wind Power Capacity Delivering Strong Output in February

At the halfway point in February, wind output in ERCOT is averaging 10.4 GW, nearly 2.2 GW above the Feb '18 average.  Should that average hold, it represents about 58BCF of natural gas equivalent for the month, an increase of 12BCF from 2018. 

On an hourly basis, the month-to-date output profile looks like this:

This represents a significant negative impact on natural gas demand.  Particularly true considering that heating degree days in Texas are lagging behind last year:

Gas should continue to gain market share from coal, but the carbon-based fuel demand is an ever shrinking piece of the pie in a state with such a large and growing wind capacity. 

January '19 did represent a new milestone for natural gas, with NG at 65.8% market share of carbon-based generation in ERCOT, against a Jan '18 level of 57.6% and a Jan '17 level of 45.6%.

PEMEX Oil and Gas Production August 2018

Despite ongoing attempts to reform the energy industry in Mexico, August crude oil output fell by 25KBOPD from July, and 114K vs last July.

Natural gas output has stabilized over the past year, after a long decline, at 4.9 BCFD.

September results are expected on October 26th.

Wind Power Growth Keeping Pace with Aggregate Demand Growth in ERCOT Region

Texas is one of the few power markets that has seen steady demand growth since the financial crisis.  But wind output has grown by about the same gross output in the last four years, such that the net demand for carbon-fueled generation hasn't grown. 

Consequently, fossil fuel market share is down 8 points over this same time frame:

And finally, a look at the trade off between gas and coal in the JAN-SEP period of '17 and '18, showing a shift upward by about 0.8 BCFD for natural gas at a given carbon-fired power demand.

Texas Railroad Commission Reports Rise in Drilling Permits for June '17

The Texas RRC released its drilling, completion, and permitting statistics for June this week.  Total new permits topped 1,200 for only the second time in years, with combo (oil+gas) and oil wells leading the charge.  Gas well permits were also up, but only represented 70 of the permits issued.

It's notable that new well completions still have not begun to follow the upward trend in permitting.  Whether that is tardy reporting, or maybe DUC count is rising, it suggests that unless many of these permits are being delayed or abandoned, we will eventually witness a surge in completions, and therefore production.

Gas new-drill completions reported in June were just 68, and oil completions were 446:

Western Hydropower Surplus Fading Quickly

The record snowfalls and subsequent runoff in the Pacific Northwest has led to massive electrical output this year, but the effect is wearing off suddenly and quickly.

In June, the surplus generation over 2016 was equivalent to about 1 BCFD of natural gas.  But June's average hydro output of 12.8 GW has fallen to 8.6 GW as of yesterday, and should generally decline further throughout the month.  

This should reduce exports to California, which would in turn increase thermal generation there.  Thermal output in CAISO has been badly lagging prior years up to now: